Estate agents leave themselves open to disciplinary action if they fail to deliver on incentives promised to clients.
Take the case of a person buying a firsthand residential property.
Before a provisional agreement for the sale and purchase was signed, a sales supervisor in an agency made a verbal promise to give the prospective purchaser half of the commission offered to the agency by the developer if she bought the property through it.
Yet the supervisor did not indicate the amount of the rebate as he did not know the commission rate at that time.
Later, the supervisor informed the purchaser that the developer would offer 2.5 percent of the property price to the agency as commission.
Given the property price was HK$3,071,350, the purchaser expected she would receive a rebate of around HK$38,000.
But the amount stated on a confirmation letter from the agency was only HK$6,000. So the prospective purchaser refused to sign the confirmation letter and lodged a complaint with the Estate Agents Authority. Its disciplinary committee found that the supervisor failed to comply with guidelines set out in a circular on practices from the EAA. That stipulates licensed agencies must set out in writing any incentives – gifts, discounts or rebates – they have offered to prospective purchasers and stipulate clearly the terms and format of the incentives.
The supervisor also failed to comply with the EAA’s code of ethics that state “estate agents and salespersons should avoid any practice which may bring discredit and/or disrepute to the estate agency trade.”
The disciplinary committee reprimanded the supervisor, suspended his license for 14 days and fined him HK$3,000. A condition was also attached to his license, requiring him to obtain 24 points in CPD Scheme subjects within 24 months.